Quickly becoming known as the ‘grey pound’, older savers are now investing their hard-earned cash in the property market, leading to a boom in the buy-to-let zone.
Low returns on savings and investments have driven many to buy a second property to rent out, and figures from Liverpool Victoria show that 1 in 12 people over 60 now own a second home.
When analysing the number of home loans issued for rental properties, the Council of Mortgage Lenders says figures have risen by 58 percent in under two years.
Previously, buy-to-let properties were seen as only available to professional investors. The fact that the Bank of England base rate has been at an all-time low for so long means savings rates and pension pay out levels have been poor. This, in turn, has driven many older people to become landlords, as they buy properties to rent out and provide a better return than their savings.
Ray Boulger from mortgage advice firm John Charcol said:
“Buy-to-let is a very attractive proposition for many savers when they sit down and do the sums.
“And interest is only going to rise, particularly when new pension rules allow more retirees to access the cash in their retirement pots. It’s likely then that we’ll see even more investors start to look at buy to let.”
By seeking the advice of a CeMAP-qualified advisor, people can make sure they get the most suitable guidance and advice when stepping into the realm of buy-to-let.